The Kenya animal feed subsector is a troubled one. With the feed prices on an unabated upward trajectory, and a finger pointing contest between feed producers, the Association of Kenya Feed Manufacturers (AKEFEMA) and the farmers, the customer has paid ultimate price.
Yet the livestock sub sector, which relies heavily on animal feeds, is hurting even as it emerges among key drivers of the Kenyan economy contributing some 13 percent to the national purse, with livestock incomes at some Sh320bn a year with informal sales, by-products and asset values included.
Animal feeds have gone up by between 50 and 94 percent since 2014, an unprecedented rise. This has locked hundreds of thousands of farmers out of the feeds which are key in complementing the dwindling pasture occasioned by failing rains.
Industry players blame the rise on an acute shortage of raw materials, high import duty and prohibitive cost of energy. Farmers on the other hand blame feed manufacturers for ulterior profit interests. AKEFEMA, the umbrella body of the feed manufacturers has also received a scathing attack for not doing enough to rope in the feed prices and harmonize the operations of the feed industry.
But even as the back and forth continues, demand for the feeds grows, with feed manufacturers unable to sate the rising appetite. And the mismatch between production and demand is worrying. In 1990, it was estimated that the livestock industry required 300 000 tonnes of feed mixtures and supplements. With the country unable to produce it had to import some of the raw materials like fishmeal,cereal bran, fishmeal, oil seed cakes and feed premixes to bolster production.
The production however had a marked growth. In 2000, the manufactured feed industry produced approximately 400 000 tonnes of feed valued at more than US$80 million. But this wasn’t enough.
Following the liberalization of the economy in the early 1990s, there was a marked increase in the quantity of ingredients imported into the country. At the same time – as an incentive to the feed manufacturing industry – the government reduced import duty on oil seed cakes from 25 percent to 10 percent, and from 25 percent to 20 percent on imported fishmeals, cereal brans and other livestock feed ingredients. Despite these incentives, ingredient prices remained high and in some cases continued to increase. This has always been the bone that farmers have picked with the feed manufacturers.
Currently, the poultry industry is the largest consumer of livestock feeds, and in 2010, accounted for 50 percent of the national feed production including chick and duck mash, growers mash, layers mash, broiler starter and broiler finisher. Specifically poultry feed constitutes 56 percent, cattle feed 32 percent, pig feed 9percent and other types that include pet, horse and fish food, 3 percent. According to estimates, the industry has a turnover of about Sh7 billion every year.
But even with the significant contribution of the sector there has not been any tangible effort to tame the runaway prices. At the moment Layers mash goes for Sh3,150 for a 70- kilogramme bag, Kienyeji mash retails at Sh1,800 per 70 kilogramme and chick mash goes for Sh3,300 for a 70 kilogramme sack which has been more than triple the price they retailed at four years ago.
Maize husks are sold at Sh1,500 per 50-kilogramme sack and remains from dagaa fish (omena) that is available in various fish markets goes for an average of Sh50 per kilogramme in most markets in Kenya.
“I don’t think AKEFEMA is doing enough to protect the farmers.We know it is representing the interests of the feed manufacturers but it should also be seen to be taming any devious behaviour in the industry. To the contrary it seems to be fanning it,” said Augustine Kibor, a large scale dairy farmer in Trans Nzoia who relies on animal feeds for his 300 cows.
But the price spike has seen him offload half of that number and diversifying to horticulture farming. Kibor’s milk which used to be supplied to different entities including schools and supermarkets is no longer available. The shortage has seen an increase in milk prices further straining household incomes.
Kibor’s plight is shared by poultry farmers across the country. The more than tripling of the chicken feeds has automatically meant an increase in egg prices. But customers who are spoilt for choice are looking at alternative markets for eggs making the Kenyan egg uncompetitive.
One such market is Uganda. For a tray of egg retailing at Sh300 in Kenya, a Ugandan trader sells at Sh250 as the cost of feeds are affordable to most farmers in the country.
“We are now making losses in our poultry business. I have been forced to offset a huge portion of my chicken because I am using money from other savings to cater to the chicken business. It has never been this worse. All the problems stem from the feed prices,” said Beretta Ngotho a chicken farmer in Limuru.
But the Association of Kenya Manufacturers has absolved itself from any blame and instead pointing fingers at a prohibitive tax regime. “Farmers are encouraged to think that the feed manufactures are profiteering at the expense of the farmers but the reality is that feed manufactures are closing down all over the country and many others are operating at half capacity and struggling to cover their costs. Akefema feels that there are some urgent issues in the livestock industry that need immediate government attention to ensure continued viability,” wrote Charles Maina the Chairman of AKEFEMA in a newspaper opinion.
The Kenya animal feed subsector is a troubled one. With the feed prices on an unabated upward trajectory, and a finger pointing contest between feed producers, the Association of Kenya Feed Manufacturers (AKEFEMA) and the farmers, the customer has paid ultimate price.
Yet the livestock sub sector, which relies heavily on animal feeds, is hurting even as it emerges among key drivers of the Kenyan economy contributing some 13 percent to the national purse, with livestock incomes at some Sh320bn a year with informal sales, by-products and asset values included.
Animal feeds have gone up by between 50 and 94 percent since 2014, an unprecedented rise. This has locked hundreds of thousands of farmers out of the feeds which are key in complementing the dwindling pasture occasioned by failing rains.
Industry players blame the rise on an acute shortage of raw materials, high import duty and prohibitive cost of energy. Farmers on the other hand blame feed manufacturers for ulterior profit interests. AKEFEMA, the umbrella body of the feed manufacturers has also received a scathing attack for not doing enough to rope in the feed prices and harmonize the operations of the feed industry.
But even as the back and forth continues, demand for the feeds grows, with feed manufacturers unable to sate the rising appetite.
And the mismatch between production and demand is worrying. In 1990, it was estimated that the livestock industry required 300 000 tonnes of feed mixtures and supplements. With the country unable to produce it had to import some of the raw materials like fishmeal,cereal bran, fishmeal, oil seed cakes and feed premixes to bolster production.
The production however had a marked growth. In 2000, the manufactured feed industry produced approximately 400 000 tonnes of feed valued at more than US$80 million. But this wasn’t enough.
Following the liberalization of the economy in the early 1990s, there was a marked increase in the quantity of ingredients imported into the country. At the same time – as an incentive to the feed manufacturing industry – the government reduced import duty on oil seed cakes from 25 percent to 10 percent, and from 25 percent to 20 percent on imported fishmeals, cereal brans and other livestock feed ingredients. Despite these incentives, ingredient prices remained high and in some cases continued to increase. This has always been the bone that farmers have picked with the feed manufacturers.
Currently, the poultry industry is the largest consumer of livestock feeds, and in 2010, accounted for 50 percent of the national feed production including chick and duck mash, growers mash, layers mash, broiler starter and broiler finisher. Specifically poultry feed constitutes 56 percent, cattle feed 32 percent, pig feed 9percent and other types that include pet, horse and fish food, 3 percent. According to estimates, the industry has a turnover of about Sh7 billion every year.
But even with the significant contribution of the sector there has not been any tangible effort to tame the runaway prices. At the moment Layers mash goes for Sh3,150 for a 70- kilogramme bag, Kienyeji mash retails at Sh1,800 per 70 kilogramme and chick mash goes for Sh3,300 for a 70 kilogramme sack which has been more than triple the price they retailed at four years ago.
Maize husks are sold at Sh1,500 per 50-kilogramme sack and remains from dagaa fish (omena) that is available in various fish markets goes for an average of Sh50 per kilogramme in most markets in Kenya.
“I don’t think AKEFEMA is doing enough to protect the farmers.We know it is representing the interests of the feed manufacturers but it should also be seen to be taming any devious behaviour in the industry. To the contrary it seems to be fanning it,” said Augustine Kibor, a large scale dairy farmer in Trans Nzoia who relies on animal feeds for his 300 cows.
But the price spike has seen him offload half of that number and diversifying to horticulture farming. Kibor’s milk which used to be supplied to different entities including schools and supermarkets is no longer available. The shortage has seen an increase in milk prices further straining household incomes.
Kibor’s plight is shared by poultry farmers across the country. The more than tripling of the chicken feeds has automatically meant an increase in egg prices. But customers who are spoilt for choice are looking at alternative markets for eggs making the Kenyan egg uncompetitive.
One such market is Uganda. For a tray of egg retailing at Sh300 in Kenya, a Ugandan trader sells at Sh250 as the cost of feeds are affordable to most farmers in the country.
“We are now making losses in our poultry business. I have been forced to offset a huge portion of my chicken because I am using money from other savings to cater to the chicken business. It has never been this worse. All the problems stem from the feed prices,” said Beretta Ngotho a chicken farmer in Limuru.
But the Association of Kenya Manufacturers has absolved itself from any blame and instead pointing fingers at a prohibitive tax regime. “Farmers are encouraged to think that the feed manufactures are profiteering at the expense of the farmers but the reality is that feed manufactures are closing down all over the country and many others are operating at half capacity and struggling to cover their costs. Akefema feels that there are some urgent issues in the livestock industry that need immediate government attention to ensure continued viability,” wrote Charles Maina the Chairman of AKEFEMA in a newspaper opinion.